Hitachi 2006 Annual Report Download - page 75

Hitachi, Ltd. Annual Report 2007 73
18. IMPAIRMENT LOSSES FOR LONG-LIVED ASSETS
For the year ended March 31, 2007, the majority of the impairment losses were recorded on long-lived property, plant
and equipment located in Japan. The High Functional Materials & Components division recognized a loss of ¥4,351
million ($36,873 thousand) primarily due to a specific type of material for semiconductors that was projected to have
lower production because of smaller demand in the market. The Digital Media & Consumer Products division recognized
a loss of ¥1,305 million (¥11,059 thousand) primarily due to a specific type of electronic parts that was projected to have
lower production because of smaller demand in the market. The Electronic Devices division recognized a loss of ¥1,294
million (¥10,966 thousand) primarily due to projection television tubes that were scheduled to reduce their production.
The fair value estimates used to determine these losses were based primarily on discounted future cash flows.
For the year ended March 31, 2006, the majority of the impairment losses were recorded on long-lived property, plant and
equipment located in the U.S. and Japan, which primarily consisted of ¥11,631 million in the Information & Telecommunication
Systems division, ¥7,265 million in the Electronic Devices division and ¥4,120 million in the High Functional Materials &
Components division. These losses were mainly the result of changes in the extent or manner the assets were used. The
fair value estimates used to determine these losses were based primarily on discounted future cash flows.
For the year ended March 31, 2005, the majority of the impairment losses were recorded on long-lived property, plant
and equipment located in Japan, which primarily consisted of ¥8,517 million in the Electronic Devices division, ¥4,954
million in the High Functional Materials & Components division and ¥4,453 million in the Corporate division. These losses
were mainly the result of changes in the extent or manner the assets were used. The fair value estimates used to determine
these losses were based primarily on discounted future cash flows.
19. RESTRUCTURING CHARGES
Certain losses incurred in the reorganization of the Company’s operations are considered restructuring charges.
Components and related amounts of the restructuring charges, before the related tax effects, for the years ended March
31, 2007, 2006 and 2005 are as follows:
Thousands of
Millions of yen U.S. dollars
2007 2006 2005 2007
Special termination benefits . . . . . . . . . . . . . . . . . . . . . . . ¥3,868 ¥2,786 ¥29,426 $32,780
Loss on fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 1,643 3,881 974
¥3,983 ¥4,429 ¥33,307 $33,754
The Company and these companies do not concede the alleged antitrust violations, but depending upon the outcome of
these investigations, fines or surcharge payments, the amount of which is uncertain, may be imposed on them. In addition,
subsequent to these actions by the competent authorities, a number of class action lawsuits have been filed against the
Company and some of these companies in the U.S. and Canada. Depending upon the outcome of the above legal
proceedings, there may be an adverse effect on the consolidated financial position or results of operations. Currently the
Company is unable to estimate the adverse effect, if any. Accordingly, no accrual for potential loss has been made.
In addition to the above, the Company and certain subsidiaries are subject to several legal proceedings and claims which
have arisen in the ordinary course of business and have not been finally adjudicated. These actions when ultimately
concluded and determined will not, in the opinion of management, have a material adverse effect on the consolidated
financial position or results of operations of the Company and subsidiaries.